TTH - I managed to have a chat to Richard Hannebery yesterday afternoon, who is managing the float at Domain Capital. I asked him about the IP issue - and was assured that Genera has receieved "Freedom to OPerate" clearance for its HPV test from a leading US Patent attorney. This apparently only came through six months ago, and was a key driver of the timing of the float - institutional investors would be wary of the company (at current valuation) without FTO as Digene has previously been very aggressive in enforcing its rights with other players such as third wave. HOwever - based on the patent attorney's review of the Genera test it does not infringe at all on third party patents. As for the way in which this matter is presented in the "risks" section . . .I used to be involved in writing the odd prospectus years ago, and the risks section is all about protecting the backsides of the promoters of the float. Therefore, it will always be written in a very negative tone. Look at any prospectus for any company and you will come away with real concerns based on the risks section drafting alone.
As for the cash position etc - I was concerned about this initially too as things are reasonably skinny going into the IPO. However, Hannebery assured me that $5 million was enough to fund the company through to its first significant commercial sales, while the offer would have to be pulled if (god forbid) the full $5 million does not come in - when it is expressed as a $5 million offer the company does not have the right to close the offer with say $3 million in the bank - they would have to give back your money instead.
Hope that helps to clarify things a bit. DECA - do you have anything to add on Freedom to Operate??
GBI Price at posting:
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